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Fed rate at lowest in history, virtually 0%

Slew Foot

Slew Foot

Lifer
http://finance.yahoo.com/

As expected Heli-Ben slashes the Fed rate in order to shock and awe the market, at least temporarily. I think its funny that the cure for irresponsible lending is to encourage more lending, but hey what do I know, Im just a guy who tries not to spend more $$ than I have.
 
Originally posted by: Slew Foot
http://finance.yahoo.com/

Fed Cuts Target for Key Rate to Record Low, Pledges to Use All Available Tools- AP
The Federal Reserve has cut its target for a key interest rate to the lowest level on record and pledged to use "all available tools" to combat a severe financial crisis and prolonged recession. The central bank on Tuesday said it had reduced the federal funds rate, the interest that banks charge each other, to a range of zero to 0.25 percent. That is down from the 1 percent target rate in effect since the last meeting in October. Many analysts had expected the Fed to make a smaller cut to 0.5 percent


As expected Heli-Ben slashes the Fed rate in order to shock and awe the market, at least temporarily.

I think its funny that the cure for irresponsible lending is to encourage more lending, but hey what do I know, Im just a guy who tries not to spend more $$ than I have.
Click to expand...

The bigger indicator is the rich still pumping in money into the market.

It's hanging around the 9K mark, it should be a third of that based on the massive losses and fraud.

They're still circling around for something to eat.
 
Because only the rich invest in the market. Not the millions who have 401(k)'s. Just because you have $0 dollars and most likely can not hold a job because you are borderline insane does not mean that others aren't putting money into the market.
 
Lowering interest rates isn't good for the currency and the USD's been on the ropes lately. Its gone from 1.26 to 1.40 against the euro in the past week and half.
 
Originally posted by: dmcowen674
Originally posted by: Slew Foot
http://finance.yahoo.com/

Fed Cuts Target for Key Rate to Record Low, Pledges to Use All Available Tools- AP
The Federal Reserve has cut its target for a key interest rate to the lowest level on record and pledged to use "all available tools" to combat a severe financial crisis and prolonged recession. The central bank on Tuesday said it had reduced the federal funds rate, the interest that banks charge each other, to a range of zero to 0.25 percent. That is down from the 1 percent target rate in effect since the last meeting in October. Many analysts had expected the Fed to make a smaller cut to 0.5 percent


As expected Heli-Ben slashes the Fed rate in order to shock and awe the market, at least temporarily.

I think its funny that the cure for irresponsible lending is to encourage more lending, but hey what do I know, Im just a guy who tries not to spend more $$ than I have.
Click to expand...

The bigger indicator is the rich still pumping in money into the market.

It's hanging around the 9K mark, it should be a third of that based on the massive losses and fraud.

They're still circling around for something to eat.
Click to expand...
You're still on the DOW 3600 kick? OK.

--

Rate cuts are a big whack, but my substantial home equity line is almost free now, it dropped 20% last month I think and I don't recall much of a cut to do that (it's tagged to prime rate). Course, any savings each month is for naught if I lost my job or anything else bad happened.
I'm just hoping I still have shoes by the time Bush leaves office.
Click to expand...
I chuckled.
Need something to throw at him.
Click to expand...
I loled, nice.

HOLY HOT f@*( look at the dollar, what the hell has happened to it!? It is being eviscerated very very recently.
 
Yep, this is great if you want a home equity line of credit. Next to nothing interest wise. This is actually LOWERING my bills.
 
I think we're turning Japanese I think we're turning Japanese I really think so.

From Time:

Japan discovered the futility of ultra-low interest rates in the 1990s, when the Bank of Japan (BOJ) tried to prod the country out of a protracted recession by lowering the rate all the way to zero in 1999 ? where it stayed, with one brief interlude, until 2006. Despite the fact that lenders could essentially get free money from the government, Japanese banks were busy recapitalizing and paring down mountains of bad assets, and had little interest in doling out more loans in a moribund economy. The zero-rate policy did little to stimulate growth.
Click to expand...
 
Pretty much the last resort is printing money and buying T-bills.

Hopefully a wave of refi's is going to take place which should help the mortgage mess and get houses moving again. Then we just have a regular old recession to deal with.
 
Originally posted by: dmcowen674
Originally posted by: Naustica
Dollar dropped like a rock after the announcement which is positive for equities.
Click to expand...

Between that and the oil production cut tomorrow, expect $200 very quickly.
Click to expand...


I'll give you $200 to shut the fuck up for a week.
 
Originally posted by: shinerburke
Originally posted by: dmcowen674
Originally posted by: Naustica
Dollar dropped like a rock after the announcement which is positive for equities.
Click to expand...

Between that and the oil production cut tomorrow, expect $200 very quickly.
Click to expand...

I'll give you $200 to shut the fuck up for a week.
Click to expand...

Golden

Gold prices rose Tuesday ahead of the Fed's meeting and are likely to continue pushing higher after the central bank's extraordinary decision to set a range for the fed funds rate of 0% to 0.25%.

 
The issue I see with this is that it states to the world that the fed has completely run out of things to do. They are spending trillions while, set interest rates as low as possible, and literally giving away money and have not stopped this.
 
Originally posted by: SarcasticDwarf
The issue I see with this is that it states to the world that the fed has completely run out of things to do. They are spending trillions while, set interest rates as low as possible, and literally giving away money and have not stopped this.
Click to expand...

The fed is not out of things to do. In fact, they've been doing much more than just lowering rates.
 
If something doesn't work the first time, the second time, etc...just keep doing it. Next up, the Fed lowers the interest rate to -1.5%.
 
Originally posted by: alchemize
Pretty much the last resort is printing money and buying T-bills.

Hopefully a wave of refi's is going to take place which should help the mortgage mess and get houses moving again. Then we just have a regular old recession to deal with.
Click to expand...

Explain how homeowners with negative equity refinance. I'd love to hear it. Same for Spidey's Heloc reference.

Housing won't start moving again until the remainder of the creative financing deals are flushed out of the system, until the 10 month backlog of unsold housing quits growing, and until prices fall even further.

People seem to think all this hubbub in the financial markets is about saving homeowners. Far from it- people who paid way too much at low rates are screwed one way or the other. Either they default, or make overblown payments until the market catches up to them somewhere down the road, maybe in a decade or so... So long as they're upside down, there's no refi, no heloc- forget it.

It's all about keeping the banks afloat long enough to beat the cash out of the investors who bought their bundled mortgage packages.

Homeowners lucky enough to have their mortgage still in the hands of the bank may get some wiggle room, some renegotiation to keep the cash flowing. Banks' treatment of mortgages they service on the behalf of investors is entirely different. They don't care- they can actually wring more money out of the investors when the homeowners default, because of the fee structure. It fattens their bottom line, helps 'em play catchup wrt the funky mortgages and derivatives they got stuck with when investors got wise...

I suspect that the vast majority of funkiness has been securitized, so, uhh, don't expect any mercy...

I'm having a little trouble figuring out how lowering the interbank rate is supposed to increase liquidity. If I can't make a profit lending to you, why would I bother taking any risk at all? Yeh, sure, it makes borrowing cheaper, but that doesn't matter if nobody is willing to lend...
 
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